Pulse Report Drinks Q2-2014

PULSE REPORT
IRI Pulse Report Drinks

Welcome to the Pulse Q2 2014 edition for drinks. We hope you find it
useful. Please do not hesitate to contact us if you have any questions
or comments at [email protected].

Q2 2014

IRIworldwide.eu
PULSE REPORT
About the Report
2
This drinks report is one of 10 super category reports designed to show high-level
comparison and analysis for retail markets across major countries in Europe.
This report contains data gathered from around Europe. This market was split into the
following categories: 1.) soft drinks, 2.) juices, squashes and syrups, 3.) mineral water, 4.)
coffee, 5.) tea and 6.) cocoa.
The report highlights key metrics, such as total sales figures, market trends, category
shares, and winners and losers for Europe and for individual countries.
The data has been sourced from IRI retail databases and Eurostat the statistical branch
of administration for the European Commission.
The countries included in the report are: France, Germany, Italy, the Netherlands, Spain
and the United Kingdom (UK).
The market channels used for each country in this report are as follows:
Country Channels used
UK Hypermarkets, supermarkets, drugstores and impulse outlets
ES
Hypermarkets, supermarkets, hard discounters and drugstores,
including the Canary Islands
DE Hypermarkets, supermarkets, hard discounters and drugstores
NL Hypermarkets, supermarkets, hard discounters and drugstores
IT
Hypermarkets, supermarkets, small self service, hard discounters and
drugstores
FR
Hypermarkets and supermarkets

For analytical purposes, the data sourced from available retail databases has been
consolidated to provide consistent results. However, for some countries it has not been
possible to source data pertaining to certain categories. When this has occurred, it has been
documented in the Notes section found at the end of the report.
PULSE REPORT
On the Radar
3
ECONOMIC FIGURES INFLUENCING CONSUMER BEHAVIOUR
Source: Eurostat, September 2013
Increasing prices and good weather
have supported positive drinks
development in Europe. World Cup
promotions, though, were not
enough to bring additional growth
across all countries.
POPULATION IN
MILLIONS
UNEMPLOYMENT
(%)
AVERAGE 12
MONTHS
INFLATION
RATES GDP IN MILLIONS ()
Jan.
2012
Jan.
2013
Sep.
2013
Average
2012
Sep.
2013
Average
2012 2012
2013
(Estimate)
France 65.3 65.6 11.1 10.2 +1.2 +2.5

2 032 297

2 059 358
Germany 80.3 80.5 5.2 5.5 +1.8 +2.4

2 644 200

2 694 499
Italy 59.3 59.6 12.5 10.7 +1.8 +3.5

1 565 916

1 568 388
Netherlands 16.7 16.8 7.0 5.3 +3.1 +2.8

600 638

604 459
Spain 46.8 46.7 26.6 25.0 +2.3 +2.3

1 049 525

1 051 076
United
Kingdom 63.4 63.8 7.5 7.9 +2.7 +3.7

1 901 001

1 854 920
PULSE REPORT
952 1 019
1 152
993 955 1 026
469
492
498
460 465
494
1 435
1 600
1 764
1 425 1 397
1 592
4 049
4 155
4 304
4 061
3 994
4 194
1 780
1 912
2 087
1 770
1 787
1 963
1 641
1 774
1 972
1 755
1 670
1 829
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
31-mar-13 30-jun-13 29-sep-13 29-dic-13 30-mar-14 29-jun-14
E
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Period Ending
UK
France
Germany
Italy
Netherlands
Spain
GLOBAL TRENDS
4
-2.1%
-0.5%
+4.0%
TOTAL EUROPE +0.4%
VALUE SALES IN MILLIONS ()
Total EU 43 606
DE 16 553
FR 7 608
UK 7 226*
IT 6 178
ES 4 125
NL 1 917
TOTAL DRINKS VALUE SALES AND % CHANGE VERSUS PRIOR YEAR
*based on an exchange rate of
1.150 to the pound
+0.6%
+1.3%
-1.6%
TOTAL DRINKS VALUE SALES FOR THE LAST SIX QUARTERS
Source: IRI retail databases; period ending 29 June 2014
PULSE REPORT
2 091
6 032
9 000 8 828
16 742
-4.0
2.0
-4.6
0.3
4.1
Soft
Drinks
Mineral
Water
Coffee Juices,
Squashes
& Syrups
Tea
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Total Sales % vs. YA
38.4%
2.1%
4.8%
20.2%
20.6%
13.8%
Soft Drinks Coffee Mineral Water Juices, Squashes & Syrups Tea Cocoa
Europe
5
9 000
8 828
6 032
913
16 742
2 091
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CATEGORY VALUE SALES
IN THE LAST YEAR
CATEGORY SHARE OF VALUE
IN THE LAST YEAR
Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom
TOP 5 CATEGORIES: EVOLUTION
Value sales () and % change versus year ago
KEY TRENDS
During the past year, value sales within
the drinks sector grew slightly across most
European countries, supporting overall EU
level momentum (+0.4%).
Price increases played the major role in
category growth. In most European
countries, one or more drinks categories
experienced price inflation. Volume, in
turn, slipped for the year.
During the last quarter, good weather
helped some countries (France, Italy) to
grow volume of non-alcoholic beverage
categories.
In the last quarter there was also the
World Cup, which is traditionally used by
some drink companies to intensify
promotions. Still, total Europe did not feel
a big volume impact for the drinks sector
(e.g., Spain and Italy did not see any
effect versus last year).

PULSE REPORT
Europe
6
CATEGORY INSIGHTS
Mineral water is among the top performing categories in every European country. The
category did not experience negative trends in any measured country. In most markets, still
water and water with minimal CO
2
are key drivers of mineral water category growth.
Furthermore, good weather is particularly good at supporting mineral water volume.
Soft drinks is the second big contributor to positive growth within the European drinks
market. Soft drinks are growing in most of the measured markets. Italy and Spain are
exceptions. In Italy, many soft drink categories lost volume and did not benefit from World
Cup promotions. The same is true in Spain. Though some soft drink categories experienced
growth, negative Coca-Cola development led to losses in the Spanish cola segment. Overall,
positive soft drink development was supported by good weather and increased promotions.
Additionally, in the Netherlands, Coca-Cola was listed at Aldi and entered the hard discounter
channel.
The hot drinks sector is in decline, led by coffee. Every country, except Spain, has a declining
coffee market. In most countries, coffee pods are experiencing growth. However, the growth
is not enough to offset huge losses in the other coffee segments, such as ground coffee and
coffee beans. In some countries, premium segments experienced growth (e.g., in the UK,
premium instant coffee is growing).
Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom
TOP LOSERS: VALUE SALES
CHANGE VERSUS A YEAR AGO ()
TOP WINNERS: VALUE SALES
354.5
327.5
15.8
0 100 200 300 400
Mineral Water
Soft Drinks
Juices, Squashes & Syrups
- 23.0
- 428.8
- 88.1
-500 -400 -300 -200 -100 0
Cocoa
Tea
Coffee
.
Millions Millions
PULSE REPORT
355
1 285
1 779
1 630
2 361
0,3
5,2
1,7 -6,4
0.9
Soft
Drinks
Mineral
Water
Juices,
Squashes
& Syrups
Coffee Tea
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16.9%
23.4%
21.4%
4.7%
2.6%
31.0%
Soft Drinks Mineral Water Juices, Squashes & Syrups Coffee Tea Cocoa
France
7
KEY TRENDS
In the French drinks market, value and
volume trends are starkly different, thanks
to a price war between retailers.
Favorable Spring weather supported
volume growth among most drinks
categories. Coffee is a notable exception.
Soft drinks have returned to positive
growth in both volume and value,
particularly colas.
Mineral water is seeing volume grow, while
values sales are on the decline.
Strong performance of Sodastream and
mainstream syrup are supporting growth
within the syrups sector.
1 779
1 630
1 285
197
2 361
355
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IN THE LAST YEAR
IN THE LAST YEAR
Value sales () and % change versus a year ago
PULSE REPORT
- 7.5
- 88.1
-100 -80 -60 -40 -20 0
Cocoa
Coffee
.
France
8
CATEGORY INSIGHTS
In mineral water, promotional activity is on the decline, but price wars are intense. The
Cristaline brand is demonstrating strength, thanks to its low price positioning.
Coca-Cola brands are now increasing in volume and value (except Coca-Cola light). Other
brands (Lipton, Oasis) are growing too.
Syrup - the soda machine trend in France has driven the positive development of syrup.
Moreover, during the financial crisis syrup remained the cheapest drink. The mainstream
flavours (grenadine and mint) are also increasing their appeal with more promotion. A new
segment appeared in June with Ouiz, a concentrated syrup brand. Its a new way to drink:
the concept is to flavour water where you are with a little bottle of syrup.
In the coffee market, pods continue to grow well, while other coffees are facing declines.
Pods and green teas are driving growth within the tea sector.
1.1
27.8
49.9
116.4
0 50 100 150
Soft Drinks
Mineral Water
Tea
Millions Millions
PULSE REPORT
651
2 778
3 635
3 508
5 808
-5,5
1,4
3,9
0,0 -6,5
Soft
Drinks
Coffee Mineral
Water
Juices,
Squashes
& Syrups
Tea
E
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M
i
l
l
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n
s
35.1%
1.0%
3.9%
21.2%
22.0%
16.8%
Germany
9
KEY TRENDS
Though the last moving annual total (MAT)
shows the drink category declining slightly
(-0.5%), year-over-year growth for Q2 is
positive (+ 0.9%).
Promotional activity associated with the
Soccer World cup in June and July supported
positive momentum.
Q1 price increases in the alcohol-free
beverage sector drove total drinks category
volume down and price up for the quarter.
In Q2, this trend is only visible in the
carbonated soft drinks (CSD) sector.
Soft drinks, particularly energy drinks,
Fassbrause, adult lemonade and mineral
water are experiencing growth.
3 635
3 508
2 778
173
5 808
651
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IN THE LAST YEAR
IN THE LAST YEAR
PULSE REPORT
Germany
10
CATEGORY INSIGHTS
Mineral water continues to demonstrate very positive development, driven by still water and
water with little CO. Both segments are poised for continued growth, despite higher average
prices in the market.
Soft drinks are gaining volume but losing value sales. Cola and lemonade are key sectors,
driven by traditionally strong World Cup Soccer (especially Coca-Cola and PepsiCo).
Meanwhile, the strongest growing segment in Germany is energy drinks, which is growing
across both private label and branded sectors. Private label volume was boosted by Aldi and
its promotional activity during the quarter. The branded business is also very much sustained
by promotions.
The high-priced adult lemonade segment continues to demonstrate strength. Eckes Granini
DieLimo, Gerolsteiner Limonade and San Pellegrino Lemonade can assist the segment. The
relatively new Fassbrause segment is growing and private label activity is on the rise in this
market space.
Value sales of coffee continue to decline, despite growing volume. Ground coffee is putting
downward pressure on the roasted coffee sector. Though single portion coffee is seeing
volume increase, significant price pressures are impacting value sales. Coffee bean sales
were increasing in the past, but the categorys value sales are declining due to price
deflation.
- 2.7
- 251.8
- 37.5
-300 -250 -200 -150 -100 -50 0
Cocoa
Tea
Coffee
.
0.8
78.5
131.1
0 50 100 150
Mineral Water
Soft Drinks
Millions
Millions
PULSE REPORT
257
874
1 758
1 383
1 833
1.0
0.2
-2.8
-3.8
-3.3
Mineral
Water
Soft
Drinks
Coffee Juices,
Squashes
& Syrups
Tea
E
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,

i
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M
i
l
l
i
o
n
s
29.7%
1.2%
4.2%
22.4%
28.5%
14.2%
Mineral Water Soft Drinks Coffee Juices, Squashes & Syrups Tea Cocoa
Italy
11
KEY TRENDS
In Italy, price and a strong wellness positioning
are supporting growth of the still water segment
which, in turn, is supporting the overall mineral
water category.
Above average temperatures are having a positive
impact on the water category, but a negative impact
on other drinks categories.
High prices are negatively impacting hot beverages
(e.g., coffee, with the exception of pods). Tea is
being viewed as a lesser-cost alternative to
expensive hot beverages, and is thus seeing a sales
boost.
Petrol price increases, which are impacting all
aspects of production (fuel, heating and electricity in
factories, packaging PET [polyethylene
terephthalate], etc.).
High fuel prices are also driving consumers to make
real choices of convenience that cause negative
trends (volume and value) for most drink
categories (water excluded). Buying on promotion
and substitutions are prevalent trading down
behaviors.
1 758
1 383
257
73
1 833
874
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IN THE LAST YEAR
IN THE LAST YEAR
PULSE REPORT
Italy
12
CATEGORY INSIGHTS
In the first half of 2014 some themes continue to influence category trends:
Weakness of consumer demand due to the economic crisis;
Increase of inflation rate, particularly driven by price increase of several raw
material (e.g. petrol that impacts the cost of transport and packaging [e.g., PET])
Retailers transferring rising cost of inputs to the shelf prices
Volume within the soft drink market has been impacted by price increases and
trade-down activity.
The CSD sector experienced remarkable decline during the past quarter. Many segments
(colas, orangeades, lemon lime, tonic, chinotti) recorded strong negative trends despite
World Cup Soccer events and associated promotional activity.
The pod segment both in the coffee and tea market is an increasing phenomena: in 2013 and
in the first quarter of 2014 it showed a double digit trend despite the super premium price
positioning.
- 60.4
- 34.2
- 3.9
- 40.5
-80 -60 -40 -20 0
Cocoa
Coffee
Soft Drinks
.
2.45
3.18
0 1 2 3 4
Mineral
Water
Tea
Millions
Millions
PULSE REPORT
93
127
631
162
893
13.0 0.8
1.8
-6.5
-6.2
Soft
Drinks
Coffee Juices,
Squashes
& Syrups
Tea Mineral
Water
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M
i
l
l
i
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n
s
0.5%
4.9%
32.9%
46.6%
8.5%
6.6%
Soft Drinks Coffee Juices, Squashes & Syrups Tea Mineral Water Cocoa
The Netherlands
13
KEY TRENDS
Total drinks is declining in the Netherlands,
in value (-2.1%) and volume (-2.8%).
Value declines were sharper versus Q1 (Q1
-1.4%), volume declines eased slightly
increased (Q1 -3.5%)
Price increases have impacted volume and
despite higher promotion pressure,
shoppers are buying less.
Hot and cold drink sectors saw volume
decline despite lower prices.
Despite Aldis introduction of Coca-Cola
into their assortment, one of the first
national brands at Aldi, hard discount
supermarkets are losing share to
supermarkets, where promotional activity
is quite high.
631
162
93
10
893
127
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IN THE LAST YEAR
IN THE LAST YEAR
PULSE REPORT
The Netherlands
14
CATEGORY INSIGHTS
Strong growth in syrups and squashes which is driving the drinks sector in The Netherlands.
This category keeps winning share of throat at the expense of other drinks, likely due to its
appeal to more price conscious shoppers in economical tough times.
Sport and energy drinks are declining within supermarkets. Grey channels, such as Action
and Op=Op Voordeelshop, are capturing share in these segments, largely due to promotion
of key brands, including Red Bull and Monster energy.
All hot drinks (coffee, chocolate and tea) are declining in volume. Although premium coffee
methods (cups and beans) are still winning the volume share, this trend is not big enough to
bring value growth to the whole category. The pod sector is growing, supported by the
introduction of the Velours brand (that is available exclusively at Albert Heijn) and further
private label introductions in other banners. Also, within this category other channels pop up
with private label cups outside the supermarket channel (for example V&D).
The total tea category is declining. Only green tea is growing, but does not bring the volume
and value to the total category. The biggest brand, Pickwick, saw volume dales decline 6.9%.
Lipton continues to grow due to high promotion pressure and the introduction of new
flavours. They have also introduced the new brands of Clipper and Dilmah that are high
priced premium products.
Private label vegetable drinks are new to the drinks category in The Netherlands, driven by
consumers quest for natural and healthy solutions. The sector is seeing low levels of
volume.
- 41.6
- 1.3
- 8.8
-50 -40 -30 -20 -10 0
Cocoa
Tea
Coffee
.
2.80
6.78
10.73
0 5 10 15
Mineral Water
Soft Drinks
Millions Millions
PULSE REPORT
133
296
806
779
2 099
1.8
0.0
1.1
-0.7
0.3
Soft
Drinks
Mineral
Water
Coffee Cocoa Tea
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0.3%
3.2%
19.5%
50.9%
18.9%
7.2%
Soft Drinks Mineral Water Coffee Cocoa Tea Juices, Squashes & Syrups
Spain
15
KEY TRENDS
During Q2 2014, soft drinks sales stabilised
in the Spanish marketplace.
Summer 2014 was when the FIFA World
Cup took place but the event did not have
a positive impact on the sales of soft
drinks.
Categories with a low market weight have
reduced promotional activity compared to
a year ago but they have a positive value
trend (for example coffee and tea).
Indian tonic, smoothies and coffee pods
are experiencing volume growth in the
Spanish market.

806
779
296
2 099
133
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IN THE LAST YEAR
IN THE LAST YEAR
PULSE REPORT
CATEGORY INSIGHTS

In soft drinks Coca-Cola and Orangina Schweppes sales decreased from a year ago, exerting
downward pressure on the soft drinks sector overall. Meanwhile, Indian tonic, iced tea, sports
drinks, energy drinks and fresh drinks increased their sales from last year, as a result or new
premium products and brands that have been launched recently. Sales in Indian tonic have
gone up steadily (+11.7% value) thanks to the gin and tonic market.
Sales within the cola sector fell during the quarter, largely due to declines of Coca-Cola brand
products.
Coffee growth was strong during the 2
nd
quarter, supported by double digit growth of coffee
pods (+19.5% versus year ago last year).
Don Simon (JGC) continued their aggressive reduction price campaign in the fresh segment.
Mineral water continues to experience strong growth, driving growth within the overall water
category. Though brands are strong, private label sales fell sharply (-3.4%).

Spain
16
- 2.0
- 0.2
- 0.3
-3 -2 -2 -1 -1 0
Soft Drinks
Juices, Squashes &
Syrups
Cocoa
.
2.3
8.3
17.1
0 5 10 15 20
Mineral
Water
Coffee
Tea
Millions
Millions
PULSE REPORT
2.3%
7.9%
15.4%
52.9%
13.6%
8.0%
569
575
1 115
981
3 823
-7.7
5.1
17.0
3.4
-1.3
Soft
Drinks
Coffee Mineral
Water
Juices,
Squashes
& Syrups
Tea
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The United Kingdom
17
KEY TRENDS
Cold drinks have benefitted from a warm
summer while tea and coffee have both
seen declines.
The coffee category is seeing sales decline,
driven by declines in regular instant coffee
volume (-6.2%). Super premium instant
coffee is seeing positive momentum.
Ground coffee is being buoyed by pods.
Mineral water has seen strong volume
gains (+14.4%). Volume gains are driving
overall value sales growth.
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IN THE LAST YEAR
IN THE LAST YEAR
1 115
981
575
163
3 823
569
PULSE REPORT
The United Kingdom
18
CATEGORY INSIGHTS
The weather remains a significant factor in UK drinks sales, with a good summer after a cold
spring driving consumers to spend on cold drinks rather than hot drinks. Water benefitted
most from favorable weather patterns.
Tea remains in long-term decline, as consumers move away from black tea. Other sectors,
such as fruit & herbal and green tea, are seeing growth, but from a small base. Unilever have
removed their Lipton brand from the shelf and replaced it with a fruit and herbal offering
under the PG brand.
In coffee, the premium priced variants are driving the sector. Instant coffee contributed
nearly 3/4 of the category value growth, particularly that of innovative micro-ground variants
and caf style products. Ground coffee is growing in both value and volume, driven by
innovation in pods.
Total water category growth is being driven by plain still water (+16.5%). Evian, Buxton and
Volvic are key brands that are leading the growth within this segment. Segment growth is
being driven by increased consumption of water without any major changes in price levels.
Increasing health awareness, well publicised war against sugar, summer weather, key
sporting events (e.g. Commonwealth Games, Tour de France) are likely to have resulted in
plain still water growth. Additionally, there has been distribution gains by Evian and Buxton
in Major Mults that have influenced the growth of this segment.
Whilst smaller in comparison, sparkling segments within both plain and flavoured water sub-
categories, are growing faster than overall plain category. Sparkling segment growth is
being driven by premium international brand San Pellegrino. Local brands, Buxton Sparkling
and Highland Spring Sparkling are winning through both increased consumption and high
levels of promotions.
- 47.7
- 5.5
- 15.1
-60 -50 -40 -30 -20 -10 0
Cocoa
Coffee
Tea
.
18.8
142.5
186.4
0 50 100 150 200
Soft Drinks
Mineral Water
Millions Millions
PULSE REPORT
Final Notes
19
Notes on category definitions for countries
Due to the diverse products found in individual countries across this market it was necessary to
consolidate the available data into the categories in this report. In some cases, it was not
possible to align products across all 6 countries. Those exceptions are listed below:
Soft drinks
The UK data in this report does not contain iced tea and other tea based beverages and the
other countries do not.
Juices, squashes & syrups
The German data in this report includes smoothies and refrigerated fruit juice and the other
countries do not.
Mineral water
The French data in this report includes flavoured mineral water whereas the other countries
do not.
The Italian data in this report includes flavoured sports drinks whereas the other countries do
not.

PULSE REPORT
Resources
20
About IRI. IRI is a leader in delivering powerful market and shopper information, predictive analysis and the foresight
that leads to action. We go beyond the data to ignite extraordinary growth for our clients in the CPG, retail and over-
the-counter healthcare industries by pinpointing what matters and illuminating how it can impact their businesses
across sales and marketing. Move your business forward at IRIworldwide.eu
Arlington Square, Downshire Way, Bracknell, Berkshire RG12 1WA, Tel +44 (0) 1344 746000
Copyright 2014 Information Resources, Inc. (IRI). All rights reserved. IRI, the IRI logo and the names of IRI products and services
referenced herein are either trademarks or registered trademarks of IRI. All other trademarks are the property of their respective
owners.
FOR MORE INFORMATION
Please contact Bjrn Steinbach,
IRI at [email protected] or
+49 (0) 211 36119 150 with questions or comments about this report.

To gain insight into opportunities across specific categories, segments, channels or retailers,
contact your IRI client service representative regarding custom analyses leveraging the
following resources:
InfoScan Census
is a syndicated retail tracking service that enables manufacturers and

retailers to acquire industry insights used to make better business decisions. InfoScan
Census utilizes the data that IRI collects from grocery, drug, and mass merchandise retailers
to provide the most comprehensive and accurate syndicated data offering in the FMCG
sector. With access to accurate, granular detail by category, geography, measure, and time
period, clients have the tools needed to develop marketing and sales strategies based on
product performance, distribution, and promotion responsiveness. All data about drinks
comes from InfoScan Census.
IRI Consulting provides strategic insights and advice leveraging a variety of data sources,
predictive analytics, enabling technologies, and business analyses to help FMCG
manufacturers and retailers address significant sales and marketing issues effectively.

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